The Case: Which Way to Go
John Phillips is ready to make a significant change in his life, but he is not sure which way to go. As a regional operations manager in the Quizno’s Sandwich Restaurant franchise company he has moved up quickly and has been offered the Vice President of Franchise Development position in the corporate headquarters in Denver, Colorado. His family is happy living in Houston, Texas but this is a great position, one he has worked hard for the past twenty years to get.
Growing up in Houston, Texas and working at his step-dad’s radiator repair shop after high school seemed to be the right thing to do, especially since he could not afford to go to college. Yet, after a few years and with a new baby on the way, John started to think about his future. Realizing that the radiator business was not interesting to him and that his step-dad did not intend for him to take it over, he began looking for another opportunity. His wife, Joan, was working as a bookkeeper for a small but growing franchise company that was looking for an operations manager. She told John about it and he applied. During the interview, he explained that he was ready for a change and would do whatever it takes to learn the business and be an asset to the company. The franchise was an automotive paint touch-up business and the owner felt John would relate to the franchisees, which were generally “blue-collar” type individuals. John did not know anything about franchising but thought the business model was intriguing and he soon become proficient with the business. After a few years, John and Joan decided that they liked the franchise concept so much they asked if they could become franchisees and move to Colorado. The owner was willing to support the endeavor and helped them get into the business. After several years building the business up, a local businessman approached John asking if he would sell the business to him. John and Joan really missed Houston, and they felt like they had done as much growing with the business as possible in their territory, so they agreed to sell and move back to Texas.
Once back in Texas John began looking for a job or another business to enter. Quizno’s was a fast growing and exciting business, giving Subway a run for their money with their “toasted” sub sandwiches. John and Joan decided that they would join the fray and they purchased a single-unit that they opened near their home. Their kids were teenagers now and it seemed to make sense as a place for them to learn business and work at the store. The store opened and did well enough for them to qualify for a second unit. Shortly thereafter, an existing unit that was underperforming was put on the market and they purchased it. Operating a three-unit franchise proved to be challenging. Especially the turn-around of the underperforming unit, which took much longer than they had expected. A developer in Houston was buying up Quizno’s units from franchisees and approach John and Joan about buying their units. While they were contemplating the offer, the Quizno’s regional president contacted John about joining the company to support franchisees in the Houston market. Deciding that the timing was right, they sold their three stores and John went to work for Quizno’s.
John understood the plight of the Quizno franchisees and was able to gain their trust and help them grow their businesses. Soon his region was outperforming all the other regions across the country. It was clear he had found his niche and the company took notice and he was quickly moved into a regional manager position to support over 800 units in several southern States.
After a few years, two unexpected events came along that helped John realize just how far he had come since working in his step-dad’s radiator shop. First, a franchise-consulting firm contacted him to see if he might be interested in joining their firm. The company provided consultation to franchise companies, and with his operational support experience, as well as having been a franchisee, they were confident he could be very successful. The offer was to become a partner and his income would be based on a portion of the profit generated by the group of 10 consultants. He would in essence be an independent contractor working for himself under their brand and with some administrative support. Secondly, a friend from his church named Phil approached John and Joan about a new business venture. Phil had acquired the franchise rights to the State of Texas for a fast growing automotive repair franchise, and he was confident John would be a super-star in the chain. Phil offered to provide the funding for John and Joan to open as many as a dozen locations in the Houston marketplace.
John and Joan headed to the beach for the weekend to think about their future. A prestigious position in a franchise company was certainly appealing, with a steady salary, good benefits package and relocation reimbursement. However, they would have to relocate to Denver and leave their two children in Texas, as they were both in college. Being confident in his ability, John liked the idea of joining the consulting practice, as it would reward him for his efforts and expertise. The sky would be the limit if he was able to build a strong base of clients, and with the firms administrative support he could focus his time on taking care of clients. Joan really liked Phil from their church and respected him as a very successful Christian businessperson. She was confident that they could be successful with the automotive franchises because of Phil’s reputation. John liked the idea of owning enough franchises that he would not have to work in them day-to-day, but focus on the overall performance, branding and expansion. As the weekend wound down, it was time to decide on their future for the next 10-15 years, but neither were sure which way to go…
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